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DECREE No. 16/2005/ND-CP OF FEBRUARY 7, 2005 ON MANAGEMENT OF INVESTMENT PROJECTS ON THE CONSTRUCTION OF WORKS

THE GOVERNMENT

Pursuant to the December 25, 2001 Law on Organization of the Government;

Pursuant to the November 26, 2003 Construction Law;

At the proposal of the Construction Minister,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Scope of application

This Decree guides the implementation of the Construction Law regarding the formulation and execution of investment projects on the construction of works; contracts in construction activities; capacity conditions of organizations and individuals engaged in formulating investment projects on the construction of works, surveying, designing, constructing, or supervising the construction of, works.

Article 2.- Classification and State management of investment projects on the construction or works

1. Investment projects on the construction of works (hereinafter collectively called construction investment projects or projects) are classified as follows:

a/ By size and nature: important national projects in which investment is approved and permitted by the National Assembly; and other projects which are classified into three groups A, B and C as stipulated in Appendix 1 to this Decree;

b/ By investment capital source:

- Projects using state budget capital;

- Projects using credit capital underwritten by the State or development investment credit capital of the State;

- Projects using development investment capital of state enterprises;

- Projects using capital of other sources, including private capital or capital of mixed sources.

2. Investments in the construction of works must conform to the overall socio-economic development planning, branch plannings and construction plannings, ensure security, social safety and environmental safety as well as compliance with the provisions of land and other relevant legislation.

3. In addition to the provisions of Clause 2 of this Article, depending on the sources of capital used for projects, the State shall also perform its management according to the following provisions:

a/ For projects using state budget capital, including component projects, the State shall manage the entire process of investment and construction, from the identification of investment undertakings, project formulation, investment decision, making of designs and total cost estimates, selection of contractors, construction to the pre-acceptance test, hand-over and commission of works. Investment deciders shall have to arrange sufficient capital for projects according to their execution schedule which must be not more than 2 years for group-C projects and more than 4 years for group-B projects.

The management of projects using state budget capital shall be decided by competent state management agencies according to their decentralized competence in accordance with the provisions of legislation on state budget.

b/ For projects of enterprises using credit capital underwritten by the State, development investment credit capital of the State or development investment capital of state enterprises, the State shall only manage them in terms of investment undertakings and size. Enterprises having such projects shall take self-responsibility for organizing the execution and management of the projects in accordance with the provisions of this Decree and other relevant provisions of law.

c/ For projects using capital of other sources, including also private capital, investors shall decide by themselves on the form and contents of management of such projects. For projects using capital of mixed sources, the capital contributors shall agree upon the mode of management or manage such projects according to the regulations applicable to the capital source accounting for the biggest percentage % in the total investment amount.

4. For projects for which investment undertakings are approved by the National Assembly and group-A projects each consisting of many component projects, if each component project may independently operate or may be executed in different investment phases stated in the documents approving the investment reports, it shall be managed and executed like an independent project.

Article 3.- Investors of construction works

Investors of construction works are persons who own capital or are assigned to manage and use capital for investment in building the works, including:

1. For projects using state budget capital, investors of construction works are decided by investment deciders before construction investment projects are formulated in accordance with the provisions of the State Budget Law.

2. For projects using credit capital, investors are capital borrowers.

3. For projects using capital of other sources, investors are owners of capital or their representatives as prescribed by law.

4. For projects using capital of mixed sources, investors shall be appointed by capital-contributing members through agreement or shall be the contributors of the biggest capital amount.

Chapter II

FORMULATION, EVALUATION, APPROVAL OF CONSTRUCTION INVESTMENT PROJECTS

Article 4.- Making of construction investment reports and application for investment licenses

1. For important national projects, construction investment reports must be made and submitted to the National Assembly for passage of investment undertakings and for permission of investment; for group-A projects, regardless of their capital sources, construction investment reports must be submitted to the Prime Minister for permission of investment.

2. Contents of a construction investment report include:

a/ The necessity to invest in building the work, favorable conditions and difficulties; regulations on exploitation and use of national resources, if any;

b/ The projected investment scope: capacity or construction acreage; components of the work, including principal, auxiliary and other structures; the projected site of construction and the land use demand;

c/ Analysis and preliminary selection of technologies and techniques; conditions of supply of equipment, raw materials, energy, provision of services and technical infrastructure; the ground clearance and resettlement plan, if any; the project’s impacts on the environment and ecology, fire and explosion prevention and fighting, security and defense;

d/ Investment form, preliminary calculation of total investment amount, the time limit for project execution, the plan on capital mobilization according to execution schedule, the project’s socio-economic benefits, and investment phases, if any.

3. Application for permission for construction investment

a/ Investors shall have to send construction investment reports to the branch-managing ministries, which act as focal agencies to assist the Prime Minister in gathering opinions of the concerned ministries, branches and localities, sum them up and put forward proposals to the Prime Minister.

b/ Time limit for gathering opinions:

Within 5 working days after receiving the construction investment reports, the branch-managing ministries must send written requests to the concerned ministries, branches and localities for comments.

Within 30 working days after receiving the requests, the consulted agencies must give written replies on the contents falling within the scope of their management. Within 7 days after receiving the written replies given within the above-said time limit, the branch-managing ministries must make reports thereon to the Prime Minister.

c/ Reports submitted to the Prime Minister shall each include:

A brief content of the investment report, the summary of the opinions of the ministries and branches and the proposal for permission of investment in building the work, enclosed with the original written opinions of the concerned ministries, branches and localities.

Article 5.- Formulation of construction investment projects

1. When investing in building works, investors must organize the formulation of projects to clearly state the necessity of investment and the benefits of the investment in building works, except for the following cases:

a/ Works for which only economic and technical construction reports are required in accordance with the provisions of Clause 1, Article 12 of this Decree;

b/ Construction works being individual dwelling houses of the people as provided for in Clause 5, Article 35 of the Construction Law.

2. A project shall be composed of an explanation part as provided for in Article 6 and a basic design part as prescribed in Article 7 of this Decree.

3. For group-B projects not yet included in any socio-economic planning, branch planning or construction planning, before the projects are formulated, the written approval of competent planning-approving agencies is required.

Article 6.- Contents of the explanation part of a project

1. The investment necessity and purpose; appraisal of the market demand and product consumption, for production and business projects; the form of investment in building the work; the construction site and land use demand; conditions of supply of materials, fuel, and other input elements.

2. Description of the sizes and construction areas of the work and its components, including principal, auxiliary and other structures; analysis and selection of technical, technology and capacity plans.

3. Execution solutions, including:

a/ The ground clearance and resettlement plan and the infrastructure construction support plan, if any;

b/ Architectural design plans for urban works and works with architectural requirements;

c/ The plan on the project exploitation and labor use;

d/ Execution phases, execution schedules and the form of project management.

4. Assessment of environmental impacts, fire and explosion prevention and fighting measures, and security and defense requirements.

5. The project’s total investment amount; the possibility of capital arrangement, capital sources and the possibility of capital allocation according to execution schedule; the plan on capital refund, for projects with capital recovery requirements; financial norms, analysis and assessment of economic and social benefits of the project.

Article 7.- Contents of the basic design of a project

1. A project’s part on basic design must indicate the major designing solution, ensure sufficient conditions for the determination of total investment amount and for the implementation of subsequent designing steps. It shall include explanations and drawings.

2. Explanations on basic design shall be presented separately or on drawings to elaborate the design and have the following principal contents:

a/ A summary of the designing task; a brief introduction of the relationship between the work and the construction planning in the area concerned; data on the terrain conditions, load and impacts; a list of applied rules and standards.

b/ Technology explanation: a brief introduction of the technological plan and the technological diagram; a list of technological equipment with major technical parameters related to the construction design.

c/ Construction explanation:

- A bird eye’s view of the total ground area: a brief introduction of the characteristics of the total ground area; construction height and co-ordinates; the system of technical infrastructure and connection points; land area in use, construction area, greenery area, construction density, land use co-efficients, ground-leveling height, and other necessary contents.

- For works built in lines: a brief introduction of the characteristics of the line of works, construction height and co-ordinates, the plan on the clearance of major obstructions along the line; the corridor for protection of the line and other characteristics of the work, if any;

- For works with architectural requirements: a brief introduction of the relationship between the work and the construction planning in the area concerned and adjacent works; the idea of the architectural design plan; color of the work; designing solutions suitable to the climatic, environmental, cultural and social conditions at the construction site;

- Technical part: a brief introduction of the geological characteristics of the work, the plan on foundation reinforcement, main force-bearing structures, the technical system and technical infrastructure of the work, ground leveling and fill-up; a list of software used in designing;

- A brief introduction of the plan on fire and explosion prevention and fighting and environmental protection;

- The estimated volume of construction jobs and equipment for the calculation of the total investment amount and the time for the building of the work.

3. Basic design drawings include:

a/ The technology drawing showing the diagram of the technology chain and major technical parameters;

b/ The construction drawing showing solutions regarding total ground area, architecture, structure, technical system and technical infrastructure of the work, with major dimensions and volumes, construction markers, co-ordinates and heights;

c/ The drawing on the fire and explosion prevention and fighting.

4. For investment projects on building works for production and business purposes, depending on the nature and contents of the projects, a number of basic design contents defined in Clause 2 of this Article may be omitted provided that the planning and architectural requirements are still ensured, the total investment amount and the projects’ investment efficiency can be computed.

5. Explanations and drawings of a basic design shall be made in at least 9 sets of copies.

Article 8.- Dossiers of construction investment projects to be submitted for approval

1. Investors shall have to send dossiers of construction investment projects to the investment deciders for approval.

2. Dossiers of construction investment projects shall each consist of:

a/ The report on the project applied for approval, made according to a set form;

b/ The project documents, including the written explanation and the basic design; documents on the evaluations of the concerned ministries and/or branches (if any);

c/ The competent authorities’ written permission of the investment, for important national projects or group-A projects.

Article 9.- Competence to evaluate construction investment projects

1. Evaluation of a construction investment project includes evaluation of the project’s explanations and evaluation of the project’s basic design.

2. The Prime Minister shall set up the State Council for Evaluation of Investment Projects to organize the evaluation of projects with their investment undertakings approved by the National Assembly and other projects as requested by the Prime Minister.

3. The provincial-level People’s Committees shall organize the evaluation of budget-capital-using projects falling under their deciding competence. For other projects, their evaluation shall be organized by the persons with competence to decide on the investment therein.

4. The competence to evaluate basic designs of group-A projects is prescribed as follows:

a/ The Industry Ministry shall evaluate the basic designs of investment projects on the building of mining or oil and gas works, power plants, electricity transmission lines, transformer stations or specialized industrial works;

b/ The Agriculture and Rural Development Ministry shall organize the evaluation of the basic designs of investment projects on the building of irrigation works and dykes;

c/ The Transport Ministry shall organize the evaluation of the basic designs of investment projects on the building of traffic works;

d/ The Construction Ministry shall organize the evaluation of the basic designs of investment projects on the building of civil works, industrial works (excluding industrial works evaluated by the Industry Ministry) and investment projects on the building of other works as requested by the Prime Minister.

e/ For investment projects on the building of works related to many specialized branches, the ministry primarily responsible for evaluating their basic designs shall be the ministry performing the state management over the branch decisive to the nature and objective of the projects and it shall be responsible for gathering opinions of the concerned ministries and branches.

5. The competence to evaluate the basic designs of group-B and group-C projects of the ministries, branches, localities and other economic sectors to be built in localities is prescribed as follows:

a/ The provincial/municipal Industry Services shall organize the evaluation of the basic designs of investment projects on the building of mining or oil and gas works, power plants, electricity transmission lines, transformer stations and specialized industrial works;

b/ The provincial/municipal Agriculture and Rural Development Services shall organize the evaluation of the basic designs of investment projects on the building of irrigation works and dykes;

c/ The provincial/municipal Transport Services shall organize the evaluation of the basic designs of investment projects on the building of traffic works;

d/ The provincial/municipal Construction Services shall organize the evaluation of the basic designs of investment projects on the building of civil works, industrial works (excluding industrial works evaluated by the provincial/municipal Construction Services) and investment projects on the building of other works as requested by the presidents of the provincial/municipal People’s Committees.

e/ For investment projects on the building of works related to many specialized branches, the provincial/municipal service primarily responsible for evaluating their basic designs shall be the service functioning to perform the state management over the branch decisive to the nature and objective of the projects and shall be responsible for gathering opinions of the concerned provincial/municipal services.

6. For basic designs of group-B or group-C projects on the building of works in lines running through many localities, the ministries defined in Clause 4 of this Article shall organize the evaluation thereof and be responsible for gathering opinions of the concerned provincial/municipal services on the construction plannings and environmental impacts at the sites of works.

7. The evaluation of construction investment projects involving security or defense secrets shall comply with the regulations of the Government.

8. Investors shall have to send the project dossiers to the competent State agencies defined in Clauses 4, 5 and 6 of this Article for evaluation of the basic designs. The time for evaluation of basic designs shall be not more than 30 working days for group-A projects, 15 working days for group-B projects, and 10 working days for group-C projects, counting from the date of receipt of complete and valid dossiers.

9. The time for evaluation of projects, including evaluation of basic designs, shall be not more than 60 working days for group-A projects; 30 working days for group-B projects, and 20 working days for group-C projects, counting from the date of receipt of complete and valid dossiers. In special cases, the time for evaluation of projects may be longer provided that it is permitted by the investment deciders.

10. The fees for evaluation of projects and basic designs shall be prescribed by the Finance Ministry after consulting the Construction Ministry.

Article 10.- Contents of evaluation of construction investment projects

1. Conformity of the projects with the socio-economic development plannings, branch development plannings and construction plannings; in cases where such plannings are not yet available, the approval of the State management agencies in charge of the domains concerned is required.

2. Compliance of the contents of the projects’ explanations with the provisions of Article 6 of this Decree.

3. Conformity of the projects with the construction investment reports of the works the investment in which has been permitted by the National Assembly or the Prime Minister, for projects for which construction investment reports must be made.

4. Suitability of the basic designs to the construction planning, of the construction scale, technology, design capacity and work grade; data used in the designs, applied rules and standards; economic and technical criteria to the projects’ requirements.

5. Suitability of the basic designs to the architectural plans selected through competition, for cases where competitions are held for selection of architectural plans.

6. Rationality of the designing solutions in the basic designs.

7. Operational capacity conditions of consultancy organizations, professional capacity of individuals engaged in formulating the projects and basic designs according to regulations.

Article 11.- Competence to decide on investment in building works

1. The Prime Minister shall decide on investment in the projects for which the National Assembly has passed the investment undertakings and permitted investment therein.

2. For other projects using state budget capital:

a/ The ministers, the heads of the ministerial-level agencies, the Government-attached agencies, the financial management agencies of the Party, thc central agencies of socio-political organizations or politico-socio-professional organizations and the presidents of the provincial-level People’s Committees shall decide on investment in group-A, group-B or group-C projects.

The ministers, the heads of the ministerial-level agencies or the Government-attached agencies, and the presidents of the provincial-level People’s Committees may authorize or decentralize the competence to decide on investment in group-B or group-C projects to their immediate subordinate agencies;

b/ The presidents of the district-level and commune-level People’s Committees may decide on investment in projects within the scope of their local budgets after such investment is passed by the People’s Councils of the same level;

c/ Depending on the practical conditions of each locality, the presidents of the provincial/municipal People’s Committees shall specifically assign the presidents of the district-level People’s Committees to decide on investment in local budget-funded projects with an investment capital of no more than VND 5 billion each and the presidents of the commune-level People’s Committees projects with an investment capital of no more than VND 3 billion each. For centrally-run cities, such decentralization shall comply with separate regulations permitted by the Prime Minister.

3. For projects using capital of other sources or of mixed sources, investors shall make investment decisions on their own and take responsibility therefor.

4. The persons with competence to decide on investment may make investment decisions only upon the availability of the project evaluation results. Particularly for projects using credit capital, the capital-lending organizations shall evaluate the financial plans and debt repayment plans in order to agree to lend or not to lend capital before the competent persons make investment decisions.

5. Decisions on investment in building works shall be made according to a set form.

Article 12.- Economic and technical reports on the construction of works

1. When investing in constructing the following works, investors shall not have to formulate projects but have to make economic and technical reports on the construction of works and submit them to the investment deciders for approval:

a/ Works for religious purposes;

b/ Works on renovation, repair, upgrade of existing office buildings or building new ones, each having total investment amount of under VND 3 billion;

c/ Social infrastructure projects using state capital and each having total investment amount of under VND 7 billion, not for business purposes, in conformity with the socio-economic development plannings and construction plannings, for which there have been investment undertakings or which have been included in the annual investment plans.

2. The contents of economic and technical reports on the construction of works shall comply with the provisions of Clause 4, Article 35 of the Construction Law.

3. The persons with competence to decide on investment, defined in Article 11 of this Decree, shall be responsible for organizing the evaluation of the economic and technical reports on the construction of works and make investment decisions.

4. For works using stage budget capital and each having total investment amount of VND 500 million or more, the construction drawing designs in the economic and technical reports on their construction shall be evaluated by the provincial/municipal services defined in Clause 5, Article 9 of this Decree. For other projects, the construction drawing designs in the economic and technical reports on their construction shall be evaluated by investors themselves, who shall then report on the evaluation results to the investment deciders prior to approval.

Article 13.- Adjustment of construction investment projects

1. Construction investment projects for which investment decisions have been issued may be adjusted only in one of the following cases:

a/ There arise force majeure events such as earthquake, typhoon, flood, whirlwind, tsunami, landslide; war or risk of imminent war;

b/ There appear unusual fluctuations in the prices of materials and raw materials, changes in the exchange rate with respect to foreign-currency capital amounts or there are new State regulations and policies permitting changes in the construction investment prices.

c/ The investment deciders or investors make adjustments when there appear new factors that bring about higher socio-economic benefits to the projects;

d/ The construction plannings see approved changes which directly affect the projects.

2. Where adjustments of the projects cause neither changes in the investment scale and objective nor increases in the approved total investment amounts, investors shall be allowed to make such adjustments. Where adjustments of the projects cause changes in the basic designs in terms of architecture, planning, investment scale and objective or increases in the approved total investment amounts, investors must submit such adjustments to the investment deciders for consideration and decision. The contents of such changes must be reevaluated.

3. Persons who decide on adjustments of construction investment projects must bear responsibility before law for their decisions.

Chapter III

EXECUTION OF CONSTRUCTION INVESTMENT PROJECTS

Section 1. DESIGNS AND COST ESTIMATES OF WORKS

Article 14.- Construction designing steps

1. A construction investment project may consist of works of one or several kinds and of one or several grades as prescribed in the Decree on quality management of construction works. Depending on the size and nature of construction works, construction designing may involve one step, two steps or three steps as follows:

a/ One-step design means construction drawing design applicable to works for which only economic and technical construction reports are required as prescribed in Clause 1, Article 12 of this Decree;

b/ Two-step design consists of basic design and construction drawing design applicable to works for which projects must be made, except for works stated at Points a and c of this Clause;

c/ Three-step design consists of basic design, technical design and construction drawing design applicable to works for which projects must be made and which are of special grade or grade I and which are of grade II but technically complicated as decided by the investment deciders.

In cases of implementation of two-step or three-step design, subsequent designing step (s) must be conformable with the approved preceding designing step(s).

2. For simple works like fences, classrooms, school buildings, dwelling houses, model or typical designs issued by competent state agencies may be used for making construction drawing designs.

3. Construction designs must comply with construction rules and standards promulgated by competent state agencies and be presented on drawings according to regulations. Designs must indicate volumes of major construction jobs based on which construction costs can be estimated.

Article 15.- Design dossiers, cost estimates of works

1. Documents used as a basis for designing:

a/ Documents on construction, hydrological and meteorological surveys and relevant legal documents;

b/ Basic designs;

c/ A list of applied construction rules and standards;

d/ Regulations on architecture and construction planning.

2. Design documents compiled for each work include explanations, design drawings and construction cost estimates; minutes on the pre-acceptance tests of designs and survey results; reports on the verification of designs and cost estimates (if any).

3. Designing organizations and individuals must hand over construction design dossiers in sufficient numbers of sets to serve the construction of works and meet the management and archival requirements, which must be at least 7 sets of copies for technical designs and 8 sets of copies for construction drawing designs.

4. Construction design dossiers must be archived according to the provisions of the archival legislation. The Construction Ministry shall issue specific regulations on archival of design dossiers.

Article 16.- Evaluation and approval of designs, cost estimates and total cost estimates of works

1. Evaluation, approval:

a/ Investors themselves shall organize the evaluation and approval of technical designs, construction drawing designs, cost estimates and total cost estimates for works for which projects must be made;

b/ Construction drawing designs and cost estimates of work components and works must be evaluated and approved before they are used for construction.

2. Contents of evaluation of designs:

a/ Conformity with the approved preceding designing steps;

b/ Observance of the applied construction standards;

c/ Assessment of the works’ safety;

d/ Rationality of the selection of technological chains and equipment, if any;

e/ Environmental protection; fire and explosion prevention and fighting.

3. Contents of evaluation of cost estimates and total cost estimates for construction of works include:

a/ Compatibility between design volumes and estimated volumes;

b/ Correctness of the application of economic and technical norms, expenditure norms, unit prices; the application of relevant norms, unit prices, regulations and policies and expenditure items in the cost estimates according to regulations;

c/ Values of cost estimates and total cost estimates of works.

4. Where investors fail to meet all capacity conditions for evaluation, they may hire qualified consultancy organizations or individuals to verify the designs and cost estimates of works as a basis for approval. Depending on the requirements of investors, the verification of designs, cost estimates and total cost estimates may be conducted for all or some of the contents specified in Clause 2 and Clause 3 of this Article.

5. Expenses for evaluation or verification of construction designs, cost estimates and total cost estimates shall be guided by the Construction Ministry and included in the total investment amounts or total cost estimates of works.

Section 2. CONSTRUCTION PERMITS

Article 17.- Permits for construction of works

1. Before commencing construction of works, investors must obtain construction permits, except for the construction of the following works:

a/ Works involving State secrets, works built under urgent orders, make-shift works to serve the construction of principal works;

b/ Works to be built in lines not running through urban centers but complying with the approved construction plannings under the construction investment projects already approved by competent state agencies;

c/ Works under the projects on the building of urban centers, industrial parks or residential quarters with their 1/500-scale detailed construction plannings already approved by competent state agencies;

d/ Works of repair, renovation or installation of interior equipment without changing the architecture, force-bearing structure and safety of the existing works;

e/ Small technical infrastructure works located in deep-lying and remote communes;

f/ Individual dwelling houses in remote or deep-lying areas outside urban centers; rural population spots for which approved construction plannings are not yet available.

2. For the building of individual works or dwelling houses in areas for which the approved plannings have been publicized but not yet executed, only permits for construction of makeshift works shall be granted, which shall have a validity duration corresponding to the period of implementation of the plannings.

3. The conditions for the grant of permits for construction of works in urban centers shall comply with the provisions of Article 65 of the Construction Law. The rights and obligations of persons who are granted the construction permits are prescribed in Article 68 of the Construction Law.

4. Construction permits shall be issued according to a set form.

Article 18.- Dossiers of application for permits for construction of urban works or dwelling houses

A dossier of application for a construction permit shall consist of:

1. The application for a construction permit, made according to a set form. In cases of application for permits for construction of makeshift works for a given term, the applications must also contain the commitment to self-dismantle the works when the ground is cleared by the State.

2. A notarized copy of one of the land use right papers as prescribed by the land legislation.

3. The design drawing displaying the locations of the level ground, the typical cross and vertical sections and the foundation ground of the work; a plan on the locations or line of works; a plan on the systems of electricity supply and water drainage and supply and their technical connection points; photos of the present state (for repair and renovation works for which construction permits are required).

Article 19.- Dossiers of application for permits for construction of rural dwelling houses

Dossiers of application for permits for construction of rural dwelling houses shall each consist of:

1. The application for a construction permit, made according to a set form.

2. A copy of one of the land use right papers as prescribed by the land legislation, certified the commune People’s Committee.

3. The plan on the construction ground of the work on the land plot and adjacent works, if any, made by the house owner himself/herself.

Article 20.- Receipt of dossiers of applications for construction permits

1. The construction permit-granting agencies shall have to receive dossiers of application for construction permits, check their validity according to the provisions of Article 18 and Article 19 of this Decree.

2. When receiving complete and valid dossiers, the construction permit-granting agencies must issue receipts indicating the date for receipt of the result. Such a receipt shall be made in 2 copies, one handed to the applicant and one archived at the construction permit-granting agency.

3. Where a dossier of application for a construction permit is incomplete, the construction permit-granting agency shall explain and guide the applicant to complete the dossier as required. The time for completion of dossiers shall not be included in the time limit for the grant of construction permits.

Article 21.- Construction permit-granting competence

1. The provincial-level People’s Committees shall authorize the provincial/municipal Construction Service directors to grant construction permits for construction works of special grade and grade I according to the grading of works prescribed in the Decree on quality management of construction works; for religious works; works being historical or cultural relics; works being monuments, advertisements, mural paintings within the administrative territories under their respective management; works situated along high streets and thoroughfares in urban centers according to the regulations of the presidents of the People’s Committees of the concerned provinces.

2. The district-level People’s Committees shall grant construction permits for other works and solitary dwelling houses in urban centers within the administrative territories under their management, excluding works specified in Clause 1 of this Article.

3. The commune-level People’s Committees shall grant construction permits for solitary dwelling houses in rural population spots with approved construction plannings within the administrative boundaries under their management according to the regulations of the district-level People’s Committees.

Article 22.- Responsibilities of construction permit-granting agencies

1. To post up the conditions, order and procedures for granting construction permits at their head offices.

2. To supply in writing information related to the grant of construction permits when it is so requested by the applicants for construction permits. The time limit for supplying such information is 7 working days as from the date of receiving the requests.

3. When they need to make clear information related to other agencies in service of the grant of construction permits but this is not the responsibility of the applicants for construction permits, the construction permit-granting agencies shall have to consult the concerned agencies for clarification and handling.

Within 10 working days after receiving written requests for opinions, the consulted organizations shall have to issue written replies to the construction permit-granting agencies. Past this time limit, if they have no written replies, they shall be deemed to have agreed and shall bear responsibility before law for all consequences caused by their non-reply or late reply.

4. Construction permits shall be granted within 20 working days as from the date of receipt of complete and valid dossiers. For individual dwelling houses, this time limit shall be 15 working days as from the date of receipt of complete and valid dossiers.

5. Persons with construction permit-granting competence must bear responsibility before law and compensate for damage caused by the grant of faulty permits or by the late grant of permits. In cases where the construction permits are granted late and the applicants for such permits still commence construction, the persons with construction permit-granting competence must compensate for damage caused to the applicants when the construction is stopped and the applicants are administratively sanctioned or when the works are forced to be dismantled due to non-compliance with construction plannings.

6. To supervise construction according to permits. The construction permit-granting agencies shall stop construction when detecting violations. Where the construction stoppage decisions have been issued but the persons having the construction permits still continue their violations, to withdraw the construction permits and refer the cases to competent authorities for handling.

7. To advise competent agencies not to provide electricity and water services, to stop business activities and services with respect to works built in contravention of plannings, built without licenses or built at variance with the granted construction permits.

8. To settle complaints and denunciations about the grant of construction permits according to the provisions of law.

9. To collect fees for the grant of construction permits according to regulations.

10. The construction permit-granting agencies must neither designate their attached designing organizations and individuals nor set up attached designing units to make designs for applicants for construction permits.

Article 23.- Extension of construction permits

1. Past 12 months as from the date of issuance of construction permits, if construction has not yet commenced, the persons having such construction permits must apply for extension of their construction permits.

2. Dossiers of application for extension of construction permits shall each consist of:

a/ The application for extension of the construction permit;

b/ The original construction permit already granted.

3. The time for consideration and permission of extension of construction permits shall not exceed 5 working days as from the date of receipt of complete and valid dossiers.

4. The construction permit-granting agencies shall grant extension of construction permits.

Section 3. SELECTION OF CONTRACTORS IN CONSTRUCTION ACTIVITIES

Article 24.- Principles for selection of contractors in construction activities

1. The selection of contractors in construction activities aims to select contractors who meet all capacity conditions to supply appropriate construction products and services, offer reasonable bids and satisfy the requirements of investors and the objectives of projects.

2. The selection of contractors in construction activities shall proceed in the following two stages:

a/ Stage of pre-qualifying selection of contractors

The pre-qualification aims to select contractors who meet all capacity conditions suitable to the requirements of bidding packages for participation in biddings at the next stage.

Depending on the size and nature of bidding packages, investors shall announce bid invitations in the mass media or send letters of invitation for bids. They shall have to supply contractors with dossiers of invitation for bidding participation containing preliminary information on the bidding packages and the questionnaire as stated in Appendix 7 (not printed herein) and the principal contents as prescribed in Clause 1, Article 25 of this Decree. Dossiers of invitation for bidding participation may be sold or supplied free of charge to contractors. To participate in pre-qualification, contractors must submit bidding participation dossiers together with a bidding participation guarantee in order to ensure that the pre-qualified contractors shall participate in the biddings. The level of bidding participation guarantees shall be decided by investors but must not exceed 1% of the price of a bidding package.

Investors shall consider and assess the capacity of contractors participating in pre-qualification in order to reject those who fail to meet the capacity conditions required in the bidding dossiers.

b/ Bidding stage

Investors shall supply dossiers of invitation for bids to contractors selected for the bidding stage. Dossiers of invitation for bids may be sold or supplied free of charge to contractors. To participate in the biddings, contractors must submit bid dossiers together with a bid guarantee in order to ensure that the contractors who are announced to win shall negotiate and sign contracts. The level of bid guarantees shall be decided by investors but must not exceed 3% of the price of a bidding package.

3. Depending on the size, nature and requirements of bidding packages, bid-inviting parties may implement both stages mentioned above or only the bidding stage for selection of contractors.

4. Principles for assessment and selection of contractors

a/ In the pre-qualifying stage, the bid-inviting parties shall check the contractors’ satisfaction of the requirements of the bidding packages and use the marking method for assessing the participating contractors’ capacity in terms of their experiences, technology and financial capability;

b/ In the bidding stage, the bid-inviting parties shall consider the contractors’ ability to supply products and services on the basis of assessing all criteria such as execution schedule, bids and product and service standards, contractual terms and other conditions proposed by the contractors in order to achieve the investment objectives and efficiency of the projects. Selected contractors are those who offer reasonable bids that will bring about the highest efficiency for the projects.

5. The selection of contractors in construction activities for construction investment projects using state budget capital, credit capital underwritten by the State, development investment credit capital of the State or development investment capital of state enterprises must comply with the provisions of this Decree and relevant legal documents on biddings.

Article 25.- General requirements on dossiers of invitation for bidding participation, dossiers of invitation for bids, bidding participation dossiers and bid dossiers

1. Dossiers of invitation for bidding participation shall each consist of the following principal contents:

a/ Information on the bidding package: scope of work; size and nature of the bidding package; type and grade of the construction work; sources of investment capital; construction location;

b/ Questions on the capability and experiences of contractors, prescribed in Appendix 7 to this Decree (not printed herein);

c/ Necessary instructions for contractors;

d/ Requirements on bidding participation guarantee.

2. Dossiers of invitation for bids shall each consist of the following principal contents:

a/ Information on design, including drawings and explanations, if any, schedule and conditions required by investor;

b/ The contract’s general and specific provisions made by the bid-inviting parties for application to the bidding package;

c/ Requirements or instructions, if any, of the bid-inviting parties for contractors regarding bid dossiers;

d/ Requirements on bid guarantee.

In cases where the pre-qualifying stage is not implemented, dossiers of invitation for bids shall also contain requirements on the capability of contractors.

3. Bidding participation dossiers shall each consist of the following principal contents:

a/ The application for bidding, made according to a set form;

b/ Bidding participation guarantee;

c/ Documents proving the capability of the contractor as required in the dossier of invitation for bidding participation, presented in charts and forms.

4. Bid dossiers shall each consist of the following principal contents:

a/ Drawings, execution solutions, technical measures and execution time table;

b/ Tables of the projected volume and the offered bid;

c/ Technical proposals, if any; proposed amendments and supplements to the contract’s general and specific provisions made by the bid-inviting party for application to the bidding package;

d/ Bidding guarantee.

Article 26.- Competitions for selection of architectural designs of construction works

1. The following construction works must have their architectural designs selected through competition:

a/ Offices of state agencies of district or higher level;

b/ Cultural, sport and other public works of grade I or special grade;

c/ Works of particular architecture in big urban centers, such as big monuments, river bridges, viaducts, radio and television broadcasting centers, central railway stations, international airports, works symbolizing local cultural or historical traditions.

2. Investment deciders shall decide to organize competitions for selection of architectural designs of works. Depending on the size of works and their timing, financial and other conditions, investors may organize local or international competitions. The selection shall be done by a competition board or through public referenda.

3. Competitions for selection of architectural designs shall be organized according to investors’ dossiers of invitation for competition participation, which must clearly state:

a/ The purpose and requirements of the competition; the location of construction of the work; designing task and architectural requirements of the work and competition guidelines;

b/ Prize, responsibilities and interests of competitors;

c/ Other relevant rules.

4. The authors of the selected architectural plans shall have their copyright guaranteed, may draw up design plans and subsequent designing steps if they meet all capacity conditions; if not, they may do so by establishing partnerships with qualified design consultancy organizations. In cases where the selected authors refuse to undertake subsequent designing steps, investors shall select appropriate design contractors for this job.

5. Apart from the works for which it is compulsory to hold architectural competitions, it is encouraged to hold competitions for works with architectural requirements.

6. The Construction Ministry shall provide guidance on competitions for selection of architectural designs.

Article 27.- Selection of construction consultancy contractors

1. Dossiers of invitation for consultancy bids must contain, apart from questions on capacity and experience prescribed in Appendix 7 to this Decree (not printed herein), requirements on the list of experts together with the offered bid, schedule and any other proposals.

2. Dossiers of invitation for consultancy bids must satisfy the requirements set by the bid-inviting parties for dossiers of invitation for consultancy bidding. Consultancy contractors shall not have to pay money as contract performance guarantee but have to buy professional liability insurance according to regulations.

3. Contractors whose bid dossiers get the highest capacity score according to regulations shall be invited to negotiate on prices and other conditions for signing contracts. In case of unsuccessful negotiation, the bid-inviting parties shall invite the contractors having the immediate lower capacity score to negotiate and sign contracts.

4. The selection of general design construction contractors for performing the whole designing work shall be as follows:

a/ For dossiers of invitation for bids, apart from complying with the provisions of Clause 1 of this Article, they must contain a content requesting the general design contractor to supply a list of sub-contractors and their jobs. In cases where partnerships are created to act as general contractors, the dossiers must contain written partnership agreements envisaging the responsibilities and jobs of each partnership member and the head of the partnership;

b/ For bid dossiers, apart from satisfying the requirements stated in Clause 2 of this Article, they must also comply with the provisions of Point a of this Clause;

c/ The evaluation and selection of general design contractors shall comply with the provisions of Clause 3 of this Article.

Article 28.- Selection of construction contractors

1. The selection of construction contractors shall comply with the provisions of Article 24 of this Decree.

2. In cases where there are fewer than 5 contractors participating in the pre-qualification, the bid-inviting parties may invite these contractors to participate right in the bidding and combine the pre-qualifying stage with the bidding stage in order to reduce the time for selection of contractors.

3. When there are special requirements on the project execution time and the bid-inviting parties are aware that there are only a number of contractors capable of performing the bidding packages, they may directly invite these contractors to participate right in the bidding stage.

In cases of directly inviting a single contractor capable of performing the bidding package, the bid-inviting party must state requirements on the bidding package so that the contractor can propose the bid, the schedule of, and solutions to performing the bidding package. If the contractor’s proposal is accepted, the bid-inviting party shall organize the negotiation and signing of the contract.

4. Assessment and selection of bid-winning contractors:

Bid-winning contractors are those who are assessed to have met the set technical requirements, offer a reasonable bid that will bring about the highest efficiency for the project.

5. In cases where the contractor is a partnership, the bidding participation dossier for the pre-qualifying stage must contain declarations on the experiences, financial and technical conditions of each contractor in the partnership regarding human resources, construction equipment to be mobilized for the bidding package and the written partnership agreement clearly stating the division of jobs, responsibilities of each member and the contractor leading the partnership.

6. For biddings for selection of general construction contractors for performing the whole construction job of works, the dossiers of invitation for bidding participation shall, apart from complying with the provisions of Clause 1 of Article 25, also have a content requesting the general contractors to make a list of expected sub-contractors and their capacity.

General contractors shall have full power to select appropriate capable sub-contractors who satisfy the requirements of bidding packages and are approved by investors.

Article 29.- Selection of general contractors for engineering, procurement of supplies and equipment and construction (general EPC contractors) for construction works

1. Depending on the nature and size of bidding packages, the selection of general EPC contractors shall comply with the provisions of Clauses 1, 2 and 3, Article 28 of this Decree.

2. Dossiers of invitation for bids shall, apart from complying with the provisions of Clause 2, Article 25 of this Decree, also clearly indicate the bid-inviting parties’ requirements and instructions for the bidding packages regarding engineering, procurement of supplies and equipment, organization of construction, implementation schedule, technology transfer and other requirements.

3. Bid dossiers of general EPC contractors must satisfy the requirements of dossiers of invitation for bids.

4. In case of direct selection of a contractor to act as general EPC contractor, the investor shall not have to compile a dossier of invitation for bidding participation but compile a dossier of the investor’s requirements with the contents specified in Clause 2 of this Article. The general EPC contractor shall decide by itself on the selection of sub-contractors.

5. The selection of general contractors for design and construction or general contractors for turnkey projects shall comply with the provisions applicable to general EPC contractors. Particularly for turnkey bidding packages, general contractors shall also formulate projects and together with the bid-inviting parties complete procedures to submit such projects for approval.

Section 4. MANAGEMENT OF CONSTRUCTION OF WORKS

Article 30.- Contents of management of construction of works

Management of construction of works covers management of construction quality, management of construction schedules, management of construction volumes, management of labor safety at construction sites, and management of the construction environment. Particularly, management of construction quality shall comply with the provisions of the Decree on management of the quality of construction works.

Article 31.- Management of construction schedules

1. Before commencement of construction works, construction schedules must be drawn up. The construction schedule must comply with the approved overall schedule of a project.

2. For construction works which have a big size and a long construction time, their construction schedules must be drawn up for each stage, month, quarter and year.

3. Construction contractors shall have to draw up detailed construction schedules, possibly arranged with necessary jobs in between, but must ensure their conformity with the overall schedules of projects.

4. Investors, construction contractors, supervision consultants and concerned parties shall have to oversee and supervise the construction schedules and make adjustments in cases where the construction time at some stages is prolonged provided that such adjustments will not affect the overall schedules of projects.

If deeming that the overall schedule of a project may be prolonged, the investor must report such to the investment decider for decision on adjustment of the overall schedule of the project.

5. It is encouraged to accelerate construction progress while ensuring construction quality.

In case of accelerating construction progress and bringing about higher efficiency for projects, construction contractors shall be considered for bonus as contracted. In case of prolonging construction progress and causing damage, the violator must compensate for damage and be fined for contract breaches.

Article 32.- Management of construction volumes

1. Construction must be implemented according to the approved design volumes.

2. Construction volumes shall be calculated and certified between investors, construction contractors and supervision consultants on the basis of period of time or construction stage and compared with the approved design volumes as a basis for pre-acceptance tests and payment as contracted.

3. When arises a volume in excess of the approved design volume or cost estimate of a work, the investor and the construction contractor must consider how to handle such volume. Particularly for works using state budget capital, investors must report such to the investment deciders for consideration and decision.

Arising volumes which are accepted and approved by investors or investment deciders shall serve as a basis for payment and settlement for works.

4. The involved parties are strictly forbidden to declare construction volumes not yet implemented or higher than those actually implemented or to connive with one another in declaring wrong volumes for payment.

Article 33.- Management of labor safety at construction sites

1. Construction contractors must work out safety measures for people and works at construction sites. If safety measures are related to many parties, they must be agreed upon by such parties.

2. Safety measures and safety rules must be publicly displayed at construction sites for all people to know and observe. At dangerous positions at construction sites, guards must be posted to warn and prevent accidents.

3. Construction contractors, investors and involved parties must regularly check and supervise the labor safety work at construction sites. When detecting violations related to labor safety, construction activities must be stopped. Those who let labor safety-related violations occur within the scope of their management shall bear responsibility before law.

4. Construction contractors shall be responsible for providing training on, guiding and disseminating safety rules. For a number of jobs with strict labor safety requirements, laborers must have labor safety training certificates. It is strictly forbidden to employ laborers who have not yet been provided with training and guidance on labor safety.

5. Construction contractors shall be responsible for providing adequate labor protection and safety equipment for laborers according to regulations when these laborers are put to work at construction sites.

6. Upon occurrence of labor safety-related incidents, construction contractors and concerned parties shall have to organize the handling thereof and report thereon to the state management agencies in charge of labor safety according to the provisions of law and also be responsible for remedying and compensating for damage caused by their failure to ensure labor safety.

Article 34.- Management of the construction environment

1. Construction contractors must apply measures to ensure a safe environment for laborers working at construction sites and protect the surrounding environment, including measures to control dust and noise, deal with waste matters and clean up the sites. For construction works situated in urban centers, they must apply measures of covering, gathering and taking waste matters to designated places.

2. In the course of transporting construction materials and waste matters, measures of covering them to ensure environmental safety and sanitation must be taken.

3. Construction contractors and investors shall be responsible for inspecting and supervising the work of environmental protection at construction sites and also subject to inspection and supervision by state management agencies in charge of environment. If construction contractors fail to observe the environmental protection regulations, investors and state management agencies in charge of environment may stop construction activities and request construction contractors to properly apply environmental protection measures.

4. Those who let polluting acts occur in the course of construction of works shall be held responsible before law and compensate for damage caused by their faults.

Section 5. FORMS OF MANAGEMENT OF CONSTRUCTION INVESTMENT PROJECTS

Article 35.- Forms of project management

1. Depending on the capacity conditions of organizations and individuals and the requirements of projects, construction investment deciders shall decide to select one of the following forms of management of construction investment projects:

a/ Hiring consultancy organizations to manage projects when the construction investors fail to meet all capacity conditions;

b/ Directly managing projects when the construction investors meet all capacity conditions on project management.

2. Where investors directly manage projects, they may set up project management boards, which shall bear responsibility before law and investors for their assigned tasks and powers.

3. Organizations or individuals engaged in project management must meet all capacity conditions prescribed by this Decree.

Article 36.- Tasks and powers of investors and project management boards in cases where investors set up project management boards

1. Investors shall have the following tasks and powers:

a/ To organize evaluation and approval of designing steps and construction cost estimates after the projects are approved;

b/ To approve bidding plans, dossiers of invitation for bidding participation, dossiers of invitation for bids, and results of bidding for bidding packages not using state budget capital;

c/ To sign contracts with contractors;

d/ To make payments to contractors according to contracted schedule or pre-acceptance test minutes;

e/ To conduct pre-acceptance tests so that construction works can be put into operation and use.

Depending on the particular conditions of each project, investors may authorize the project management boards to perform some or all of their tasks and powers.

2. Project management boards shall have the following tasks and powers:

a/ To complete procedures for land hand-over and receipt, and application for construction permits, prepare ground for construction and perform other jobs in the service of construction of works;

b/ To prepare design dossiers, cost construction estimates or total construction cost estimates for evaluation and approval by investors according to regulations;

c/ To compile dossiers of invitation for bidding participation, organize selection of contractors;

d/ To negotiate and sign contracts with contractors as authorized by investors;

e/ To perform the task of supervising construction of works if meeting all capacity conditions;

f/ To conduct pre-acceptance tests, make payment and settlement according to signed contracts;

g/ To manage the construction quality, volume, schedule and costs, safety and environmental sanitation of construction works;

h/ To conduct pre-acceptance tests and hand-over of completed works;

i/ To make annual investment capital implementation reports and final settlement reports when the completed projects are put into operation and use.

3. Project management boards may each manage simultaneously many projects when they meet all capacity conditions and it is so agreed by investors. They must not set up their attached project management boards or revenue-generating non-business units for project management.

For investment projects on the construction of works which are big, complicated or in lines, project management boards may hire consultancy organizations to manage component projects.

4. Project management boards may hire on a contractual basis foreign consultants or consultancy organizations that are experienced and capable to collaborate with project management boards in managing the application of new construction technologies which domestic consultants are unable to manage or which have other special requirements.

The hiring of foreign consultants for projects using state budget capital must be permitted by persons with competence to decide on investment.

5. For projects executed in the form of general contracts, apart from the tasks defined in Clause 2 of this Article, project management boards must also perform the following tasks:

a/ To negotiate with general contractors on dossiers of invitation for bidding participation, dossiers of invitation for bids for procurement of key equipment and technology and on expenses for procurement of equipment included in the value of contracts;

b/ To approve lists of sub-contractors in case of designation of general contractors.

Article 37.- Tasks of investors and project management consultancy organizations in cases where investors hire project management consultants

1. Investment deciders shall decide on the form of selection of project management consultants. The selected consultancy organizations must meet all capacity conditions suitable to the size and nature of projects and must be independent consultancy organizations.

2. Responsibilities of investors in cases of hiring consultancy organizations to manage projects:

a/ To select and sign contracts with project management consultancy organizations which meet all capacity conditions suitable to projects;

b/ To endorse payments to contractors at the requests of project management consultants;

c/ To create all conditions for the operation of project management consultancy organizations;

d/ To take responsibility before law and compensate for damage when conniving with project management consultancy organizations or contractors in misusing investment capital.

3. Tasks of project management consultancy organizations:

a/ To check design dossiers, cost estimates or total cost estimates of works before they are approved by investors;

b/ To compile dossiers of invitation for bids, advise on selection of contractors;

c/ To perform the task of supervising construction if meeting all capacity conditions;

d/ To conduct pre-acceptance tests, make payments and financial settlements for the signed contracts; project management consultants must be fully responsible before law and investors for the accuracy and reasonability of payment values;

e/ To manage the construction quality, volume, schedule and costs, safety and environmental sanitation of projects;

f/ To test and hand over the works;

g/ To make annual investment capital implementation reports and final settlement reports when the completed projects are put into operation and use.

Depending on the conditions of projects, investors may assign other tasks to project management consultants, which must be specified in the contracts.

4. Project management consultancy organizations shall bear responsibility before law and investors for the contents committed in the contracts. They must compensate for damage caused by their faults in the course of project management. Project management consultants must bear responsibility for project management activities at construction sites.

Section 6. MANAGEMENT OF EXPENSES OF CONSTRUCTION INVESTMENT PROJECTS

Article 38.- Principles for management of expenses of construction investment projects

1. The State shall promulgate, guide and supervise the implementation of regulations, policies, principles and methods of making and adjusting unit prices and cost estimates; economic and technical norms in construction activities; expense norms in construction activities for making, evaluating, approving and managing total investment amounts, total cost estimates, cost estimates, and payment of investment capital for construction of works.

2. Expenses of construction investment projects shall be determined for works according to construction designing steps and expressed in total investment amounts, total cost estimates and cost estimates of works.

3. Expenses of construction investment projects using state budget capital, development investment credit capital of the State, credit capital underwritten by the State or development investment capital of state enterprises must be calculated and managed on the basis of the system of economic and technical norms and expense norms in construction activities, the system of construction prices as well as relevant mechanisms and policies promulgated by competent state agencies.

4. The provincial-level People’s Committees shall base themselves on the principles stipulated in Clauses 1, 2 and 3 of this Article to direct the provincial/municipal Construction Services to coordinate with the concerned provincial/municipal Services in drawing up tables of costs of materials and labor and expenses for use of construction machines, which are suitable to the practical conditions of their localities, promulgate them and guide their application to construction works situated in their respective provinces.

5. The Construction Ministry shall guide the projection and management of expenses of construction investment projects.

Article 39.- Total investment amounts of construction investment projects

1. Total investment amount means an aggregate of expenses of the entire project determined in the project formulation stage, comprising construction expense; equipment expense; compensation, ground clearance and resettlement expense; and other expenses, including working capital for production and business projects, loan interests arising during the construction period and standby expense.

2. Total investment amounts indicated in investment decisions shall serve as a basis for planning and managing investment capital and determining investment efficiency of projects. For projects using state budget capital, their total investment amounts shall be the maximum expense limit which investors may use for investment in construction of works.

3. Total investment amounts shall be determined on the basis of the volume of jobs to be performed in the projects, basic designs, investment capital ratios, standard construction expenses or construction expenses of executed projects with similar economic and technical standards.

4. Total investment amounts may be adjusted only when projects are adjusted in accordance with the provisions of Article 13 of this Decree.

5. Any adjustment of total investment amounts of projects using state budget capital must be permitted by investment deciders and any changes compared with the approved total investment amounts must be re-evaluated. For projects using capital of other sources, their investors themselves shall decide on such adjustment.

Article 40.- Cost estimates and total cost estimates of works

1. Construction cost estimates shall be determined for construction works. Construction cost estimates include cost estimates of work components and cost estimates of jobs of work components.

Construction cost estimates shall be elaborated on the basis of the volumes projected in the designs or required by the jobs of the works as well as the unit prices and norms of expenses necessary for completing such volumes. A construction cost estimate covers construction expense, equipment expense, other expenses and standby expense.

2. The approved construction cost estimates shall serve as a basis for signing contracts, payment between investors and contractors in cases of designation of contractors; as a basis for determining construction costs of works.

3. Total construction cost estimate of a project means all expenses necessary for investment in construction of work(s), determined in the technical design stage for cases of three-step design, at the construction drawing design stage for cases of one-step or two-step design, and serves as a basis for management of construction costs of the work(s).

A total cost estimate comprises an aggregate of construction cost estimates and other expenses for a project. For a project composed of only one work, the construction cost estimate is also the total cost estimate.

4. For projects using state budget capital, credit capital underwritten by the State or development investment credit capital of the State, upon commencement of works, there must be approved designs, cost estimates and total cost estimates. For important national projects and group-A projects, if it is necessary to commence construction of some works or work components before total cost estimates are approved, there must be approved designs and cost estimates for such works or work components. By the time when 30% of the construction value in the total investment amounts is implemented at the latest, there must be approved total cost estimates.

5. Adjustment of cost estimates and total cost estimates for construction of works

a/ Cost estimates and total cost estimates for construction of works may be adjusted only upon the occurrence of one of the cases specified in Clause 1, Article 13 of this Decree;

b/ For projects using state budget capital, if the adjusted total cost estimates exceed the approved total cost estimates, investors shall have to conduct re-evaluation and re-approval, report thereon to the investment deciders and bear responsibility for their approval. If the adjusted total cost estimates exceed the approved total investment amounts, permission of the investment deciders shall be required.

Article 41.- Advance of construction investment capital

The advance of construction investment capital shall be effected immediately when the construction contracts become effective, unless otherwise agreed upon by the involved parties, and is prescribed as follows:

1. For consultancy contracts, at least 25% of the contract value shall be advanced and allocated for jobs for which consultants are hired. For consultancy contracts performed by foreign consultancy organizations, the capital advance shall comply with international practices.

2. For construction bidding packages:

a/ For bidding packages of VND 50 billion or more each, 10% of the contract value shall be advanced;

b/ For bidding packages of between VND 10 billion and under VND 50 billion each, 15% of the contract value shall be advanced;

a/ For bidding packages of under VND 10 billion each, 20% of the contract value shall be advanced.

3. For the procurement of equipment, depending on the value of each bidding package, the amount of advance capital shall be agreed upon by the two parties but shall not be lower than 10% of the value of the bidding package. Some big- value structures and semi-finished products used in construction which must be manufactured beforehand to ensure construction schedule and some kinds of supplies which are special or seasonal and must be reserved shall be eligible for advance capital. The amounts of advance capital shall be based on the needs of production, manufacture, import and reserve of the above-said kinds of supplies.

4. For bidding packages or projects executed under EPC contracts, the advance of capital for the procurement of equipment shall be based on the supply schedule stated in the contracts. For other jobs, the amount of advance capital shall be equal to 15% of the value of the jobs stated in the contracts.

5. The advance of capital for ground clearance shall comply with the ground clearance plans.

6. For bidding packages using state budget capital, the amounts of advance capital shall not exceed the annual capital plans of the bidding packages.

7. The recovery of advance capital shall start when payments made for the completed volume of a bidding package reach 20% to 30% of the contract value. Advance capital shall be gradually recovered each time when payment is made for the completed volume and fully recovered when payments made for the completed volume of the bidding package reach 80% of the contract value. For ground clearance jobs, the recovery of advance capital shall finish after completion of such jobs.

Article 42.- Payment of construction investment capital

1. The payment of construction investment capital for jobs, groups of jobs or the whole work of project formulation, survey, design, construction, supervision and other construction activities must be based on the value of actually completed volumes and the payment contents and mode indicated in the signed contracts.

2. For construction investment projects using foreign capital or bidding packages put up for international bidding under the credit agreements signed with the Vietnamese Government which contain different provisions on capital advance and payment, the signed agreements shall apply.

3. For projects using state budget capital, in the year of completion of construction or of commission of the works, investors must make full payments to the contractors for the completed jobs, excluding the sum of money kept according to regulations for work warranty.

4. Within 10 working days as from the date contractors submit valid payment dossiers, investors must make payments for the value of the implemented work volume to the contractors. For projects using state budget capital, within 3 working days as from the date of receipt of the contractors’ complete and valid documents of request for payment, investors must complete all procedures and send disbursement requests to the capital-granting or -lending agencies. Within 7 working days as from the date of receipt of complete and valid dossiers, the capital-granting or -lending agencies must make payment.

The capital-granting or -lending agencies shall have to compensate for damage caused by late payment due to their faults.

5. In the course of execution of projects, if investors make late payment for the completed work volume, they must pay interests thereon at the bank interest rate agreed upon by the parties in the contracts to the contractors for the late payment.

6. The Finance Ministry shall provide detailed guidance on the advance and payment of construction investment capital for projects using state budget capital.

Article 43.- Settlement of construction investment capital

1. Investors shall have to settle construction investment capital immediately after the completed works are put into operation and use at the requests of the investment deciders.

2. The settled investment capital covers all lawful expenses made in the course of investment to put the project concerned into operation and use. Lawful expenses are expenses made in compliance with the approved designs and cost estimates, the norms, unit prices, financial and accounting regulations, the signed economic contracts and other relevant regulations of the State. For project using state budget capital, the settled investment capital must not exceed the total investment amount already approved by competent authorities.

3. Investment deciders shall be persons with competence to decide to approve the investment capital settlements of completed projects. Particularly for projects in which investment is decided by the Prime Minister, the Finance Minister shall approve their settlements.

4. Before giving their approval, persons with competence to decide to approve investment capital settlements shall use functional units under their management to directly verify the investment capital settlements of completed projects or re-verify those of projects which have their investment capital audited by hired auditors before approval, and bear responsibility before law for their decisions.

5. Investors shall be responsible for compiling investment capital settlement dossiers for completed projects and submit them to competent persons for approval within 12 months for important national projects and group-A projects, within 9 months for group-B projects and with 6 months for group-C projects as from the time the completed works are put into operation and use.

6. The Finance Ministry shall be responsible to the Government for performing uniform state management over investment capital settlement; providing detailed guidance on investment capital settlement for completed projects, inspecting the work of investment capital settlement; periodically or irregularly re-evaluate the investment capital settlements of group-A projects using state budget capital.

7. The Construction Ministry shall guide the method for conversion of implemented construction investment expenses to the price level at the time of hand-over and putting of the works of the projects into operation and use, serving as a basis for compilation of investment capital settlement dossiers and for valuation of immovable and movable assets handed over for production and business.

Chapter IV

CONTRACTS IN CONSTRUCTION ACTIVITIES

Article 44.- General principles for conclusion of contracts in construction activities

1. Contracts in construction activities (hereinafter called construction contracts for short) shall be concluded after the bid assignors complete the selection of contractors according to regulations.

2. Construction contracts must be made in writing according to a form set by the Construction Ministry.

3. The conclusion and performance of construction contracts must comply with the provisions of this Decree and other relevant law provisions on contracts.

Article 45.- Construction contract dossiers

1. A construction contract dossier shall comprise a construction contract and document attached thereto. The basic contents of a construction contract are defined in Article 108 of the Construction Law.

2. Documents attached to a construction contract shall form an integral part of the contract. Depending on the size and nature of a job, documents attached to a construction contract shall cover all or some of the following contents:

a/ The bid-winning notice or document on the designation of the contractor;

b/ Specific and general conditions of the contract;

c/ Dossier of invitation for bidding participation, dossier of invitation for bids, bidding participation dossier and bid dossier;

d/ The contractor’s proposals;

e/ Technical instructions;

f/ Design drawings;

g/ Written amendments and/or supplements;

h/ Tables and forms;

i/ Contract performance guarantee; guarantee for advance capital and other kinds of guarantee, if any;

j/ Other relevant documents.

3. The parties to a contract may agree upon the priority order for application of contract documents specified in Clause 2 of this Article if these documents contain different provisions.

The Construction Ministry shall provide guidance on contracts in construction activities.

Article 46.- Negotiation and conclusion of construction contracts

1. Depending on the size, nature and implementation time requirement of each project, investors may sign contract with one or more than one principal contractor. Each principal contractor may sign job performance contract with one or more than one subcontractor. The volume of jobs performed by subcontractors must not exceed 30% of the job volume of a contract.

2. Where investors sign contracts with many principal contractors, the contents of these contracts must ensure uniformity and synchrony in the process of performance of jobs under such contracts.

3. Where the contractor is a partnership, contractors in the partnership must appoint a representative of the partnership for negotiation. The contractor leading the partnership or all contractors joining the partnership must sign the construction contract, depending on the request of the bid assignor. Contractors in a partnership must be responsible collectively and individually before the investor for the construction schedule and quality under the signed contract.

4. The negotiation and conclusion of contracts must be based on the results of the selection of contractors, conditions for performance of jobs, dossiers of invitation for bids, bid dossiers and proposals of the selected contractors and other relevant documents.

5. Depending on their agreement, the parties to a construction contract may entrust the coordination, supervision and pre-acceptance test of jobs under the contract.

6. Construction contracts shall become effective as from the date the parties to the contracts sign the contracts, unless otherwise agreed upon by the parties.

Article 47.- Mode of payment in construction contracts

Based on the performance time and nature of contracts, the involved parties may agree upon the application of one or a combination of the following payment modes:

1. Payment according to package prices: The bid assignors shall make payments to the contractors according to the package prices stated in the contracts. This mode may apply to bidding packages with clearly determined volume, quality and time. Any amounts arising outside the contracts not attributable to the contractors shall be considered and decided by the investment deciders.

Payments may be made at each stage or for each completed job or in a lump sum upon completion of the performance of the whole contracts.

2. Payment according to fixed unit prices: The contract assignors make payments to the contractors for completed jobs at the unit prices pre-determined in the contracts. The value of payment shall be calculated by multiplying the actually completed job volume with the unit price pre-determined in the contracts. If the arising volume exceeds the volume pre-determined in the contract by over 20%, the unit price of the arising volume may be re-negotiated.

3. Payment according to adjusted prices: shall be applied to bidding packages the quantity and volume of which cannot be accurately determined due to lack of conditions at the time of signing of the contracts or which experience big fluctuations in prices adjusted by the State and are executed under contracts with a performance term of over 12 months.

Chapter V

CAPACITY CONDITIONS OF ORGANIZATIONS AND INDIVIDUALS IN CONSTRUCTION ACTIVITIES

Article 48.- General provisions on capacity conditions of organizations and individuals

1. Organizations and individuals engaged in construction activities must meet all conditions suitable to each kind of projects; kind and grade of works and jobs in accordance with the provisions of this Decree.

2. Individuals engaged in construction activities must have training diplomas and certificates relevant to the jobs they undertake, which are granted by lawful training establishments.

3. Individuals holding the posts of manager of construction planning or construction blueprint, chief designer or manager of construction survey or supervisor of construction and individuals providing independent professional services of designing construction plannings, designing construction of works or supervising construction must have practicing certificates as prescribed.

4. Individuals holding the post of project management consultancy manager, construction site chief commander or construction supervisor must not concurrently hold more than one post-based job at a time.

Individuals holding the posts defined in Clauses 3 and 4 of this Article may sign long-term labor contracts with only one organization according to the provisions of law.

5. The construction activity capacity of organizations shall be determined at different levels based on the construction capacity of individuals in the organizations, the construction activity experiences, financial capability, equipment and management capacity of the organizations.

6. A consultancy organization may perform one, some or all of jobs of formulating construction investment projects, managing projects, surveying, designing for the construction of works and supervising the construction of works if they meet all capacity conditions prescribed by this Decree. For projects using state budget capital, credit capital underwritten by the State or development investment credit capital of the State, construction design contractors must not sign supervision consultancy contracts with investors for works they have designed; construction supervision contractors must not sign construction quality expertise contracts with construction contractors for works they have supervised.

Consultancy organizations shall be ranked on the basis of the consultancy jobs they are performing.

7. When selecting contractors for performing jobs in construction activities, investors must base themselves on this Decree’s provisions on capacity conditions and must bear responsibility before law for damage caused by their selection of contractors who fail to meet all capacity conditions relevant to the jobs.

Article 49.- Practicing certificates

1. Practicing certificates are written professional capacity certifications granted to engineers or architects who have adequate professional qualifications and experiences for practicing in the domains of construction planning design, construction survey, design of construction works and supervision of construction.

2. Practicing certificates shall be made according to a set form and be valid nationwide. Practicing certificates must clearly state the permitted practicing scope and domain.

3. Practicing certificates shall be granted by the Construction Minister. The Construction Minister shall decide to set up an advisory council to assist him/her in granting practicing certificates.

4. The Construction Ministry shall provide detailed guidance on the grant of practicing certificates and define the functions, tasks and operation regulations of the advisory council.

Article 50.- Conditions for grant of architect’s practicing certificates

To be granted architect’s practicing certificates, the applicants must have university or higher degrees in the architecture or construction planning discipline, at least 5 years’ experiences in the designing work and have joined in making architectural designs of at least 5 works or 5 construction planning blueprints, which have been approved.

Article 51.- Conditions for grant of engineer’s practicing certificates

To be granted engineer’s practicing certificates, the applicants must have university or higher degrees in a discipline relevant to the domain in which they apply for registration, have at least 5 years’ experiences in such domain and have joined in making designs or conducting surveys for at least 5 works.

Article 52.- Conditions for grant of practicing certificates for supervision of construction of works

1. To be granted practicing certificates for supervision of construction of works, the applicants must have university or higher degrees in a discipline relevant to the domain in which they apply for registration; have personally joined in designing, constructing, or supervising the construction of, works for at least 5 years; and have attended a course of training in construction supervision skills.

2. For deep-lying and remote areas, the applicants may be those who have college or intermediate degrees in relevant construction disciplines; have personally joined in designing, constructing, or supervising the construction of, works for at least 5 years; and have attended a course training in construction supervision skills. These certificates shall be only valid for practicing the profession in deep-lying and remote areas.

Article 53.- Capacity conditions for project formulation managers

1. The capacity of project formulation managers is divided into 2 classes based on the kind of works. Project formulation managers must have university degrees in a specialized discipline relevant to the nature and requirement of projects, and must satisfy conditions corresponding to either of the following classes:

a/ Class 1:

Having worked continuously in project formulation for at least 7 years, having managed the formulation of one group-A project or two group-B projects of the same kind or having worked as class-1 design manager for works of projects of the same kind.

b/ Class 2:

Having worked continuously in project formulation for at least 5 years, having managed the formulation of one group-B project or two group-C projects of the same kind or having worked as design manager of class 2 or higher class for works of projects of the same kind.

c/ Particularly for deep-lying and remote areas, individuals who have college or intermediate degrees in a specialized discipline relevant to the kind of projects, have continuously worked in project formulation or designing for at least 5 years shall be recognized as class-2 project formulation managers.

2. Scope of activity:

a/ Class 1: To work as project formulation managers for important national projects, group-A, group-B or group-C projects of the same kind;

b/ Class 2: To work as project formulation managers for group-B or group-C projects of the same kind;

c/ For individuals who are not yet classified, they may work as project formulation managers for projects of the same kind for which only economic and technical construction reports are required.

Article 54.- Capacity conditions for consultancy organizations engaged in project formulation

1. The capacity of project formulation organizations is divided into 2 classes based on the kind of projects as follows:

a/ Class 1:

Having at least 20 persons who are architects, engineers and economic engineers suitable to the requirements of projects; some of whom meet all conditions for working as class-1 project formulation managers or class-1 design managers for works of the same kind.

b/ Class 2:

Having at least 10 persons who are architects, engineers and economic engineers suitable to the requirements of projects; some of whom meet all conditions for working as class-2 project formulation managers or class-2 design managers for works of the same kind.

2. Scope of activity:

a/ Class 1: To formulate important national projects, group-A, group-B or group-C projects of the same kind;

b/ Class 2: To formulate group-B or group-C projects of the same kind;

c/ For organizations failing to meet all conditions for classification, they may only make economic and technical reports for works of the same kind.

Article 55.- Capacity conditions for project management consultancy directors

1. The capacity of project management consultancy directors is divided into 2 classes based on the kind of projects. Project management consultancy directors must have university degrees in the construction discipline relevant to the requirements of projects and meet the conditions corresponding to each of the following classes:

a/ Class-1 project management consultancy directors:

- Having worked continuously in designing or construction for at least 7 years, having worked as project management consultancy directors or deputy directors of one group-A project or two group-B projects of the same kind or as class -1 construction site chief commanders or class-1 design managers.

b/ Class-2 project management consultancy directors:

- Having worked continuously in the designing or construction work for at least 5 years, having worked as project management consultancy directors or deputy directors of one group-B project or two group-C projects of the same kind or as class-2 construction site chief commanders or class-2 design managers.

c/ For deep-lying and remote areas, those who have college or intermediate degrees in the construction discipline relevant to the kind of works, have at least 5 years’ experiences in project formulation or designing or construction may hold the post of class-2 project management consultancy director.

2. Where investors set up project management boards, the project managers must have a capacity corresponding to that of project management consultancy director defined in Clause 1 of this Article.

3. Scope of activity:

a/ Class 1: To manage important national projects, group-A, group-B or group-C projects;

b/ Class 2: To manage group-B or group-C projects.

Article 56.- Capacity conditions for consultancy organizations engaged in project management consultancy

1. The capacity of project management consultancy organizations is divided into 2 classes as follows:

a/ Class 1:

- Having class-1 project management consultancy directors suitable to the kind of projects;

- Having at least 30 architects, engineers and economic engineers suitable to the requirements of projects, of whom at least three are economic engineers;

- Having managed at least one group-A project or two group-B projects of the same kind.

b/ Class 2:

- Having class-2 project management consultancy directors suitable to the kind of projects;

- Having at least 20 architects, engineers and economic engineers suitable to the requirements of projects, of whom at least two are economic engineers;

- Having managed at least one group-B project or two group-C projects of the same kind.

2. Scope of activity:

a/ Class 1: To manage important national projects, group-A, group-B or group-C projects;

b/ Class 2: To manage group-B or group-C projects.

c/ For organizations which fail to meet all conditions for classification, they may only manage projects for which only economic and technical construction reports are required.

Article 57.- Capacity conditions for construction survey managers

1. The capacity of construction survey managers is divided into 2 classes as follows:

a/ Class 1: Having engineer’s practicing certificates, having worked as class-2 survey managers and having managed 5 survey tasks of grade-II works;

b/ Class 2: Having engineer’s practicing certificates, having joined in 3 survey tasks of grade-II works or 4 survey tasks of grade-III works since obtaining engineer’s practicing certificates.

2. Scope of activity:

a/ Class 1: To work as survey managers for special-grade, grade-I, grade-II, grade-III or grade-IV works of the same kind;

b/ Class 2: To work as survey managers for grade-II, grade-III or grade-IV works of the same kind;

c/ For terrain surveys, survey managers may act as managers of surveys of all sizes.

Article 58.- Capacity conditions for consultancy organizations engaged in construction survey

1. The capacity of construction survey organizations is divided into 2 classes as follows:

a/ Class 1:

- Having at least 20 engineers suitable to the requirements of survey tasks, some of whom meet all conditions for working as class-1 survey managers;

- Having adequate equipment suitable to each kind of surveys and standardized laboratories;

- Having performed at least one survey task of special-grade or grade-I works or two similar survey tasks of grade-II works.

b/ Class 2:

- Having at least 10 engineers suitable to the requirements of survey tasks, some of whom meet all conditions for acting as class-2 survey managers;

- Having adequate equipment suitable to each kind of surveys;

- Having performed at least one survey task of special-grade or grade-II works or two similar survey tasks of grade-III works.

2. Scope of activity:

a/ Class 1: To perform survey tasks of the same kind for works of special grade, grade I, grade II, grade III or grade IV;

b/ Class 2: To perform survey tasks of the same kind for works of grade II, grade III or grade IV;

c/ For terrain surveys, only survey organizations of class 1 or class 2 may conduct terrain surveys of all sizes.

Article 59.- Capacity conditions for construction design managers

1. Construction design managers are divided into 2 classes as follows:

a/ Class 1:

- Having architect’s or engineer’s certificates relevant to the jobs they undertake;

- Having worked as design managers for at least one special-grade or grade-I work or two grade-II works of the same kind or having worked as chief designers in one principal professional domain for three special-grade or grade-I works of the same kind.

b/ Class 2:

- Having architect’s or engineer’s certificates relevant to the jobs they undertake;

- Having worked as design managers for at least one grade-II work or two grade-III works of the same kind or have worked as chief designers in one principal professional domain for three grade-II works of the same kind.

2. Scope of activity:

a/ Class 1: To work as design managers for special-grade, grade-I, grade-II, grade-III or grade-IV works of the same kind and as project formulation managers for group-A, group-B or group-C projects of the same kind;

b/ Class 2: To work as design managers for grade-II, grade-III or grade-IV works of the same kind and as project formulation managers for group-B or group-C projects of the same kind.

Article 60.- Capacity conditions for chief designers of construction

1. Chief designers of construction are divided into 2 classes as follows:

a/ Class 1:

- Having architect’s or engineer’s certificates relevant to the jobs they undertake;

- Having worked as chief designers for at least one special-grade or grade-I work or two grade-II works of the same kind.

b/ Class 2:

- Having architect’s or engineer’s certificates suitable to the jobs they undertake;

- Having worked as chief designers of construction for at least one grade-II work or two grade-III works of the same kind or having joined in designing five works of the same kind.

c/ Particularly for deep-lying and remote areas, individuals who have college or intermediate degrees in a specialized discipline relevant to the kind of works, having worked continuously in designing for at least 5 years may work as chief designers for grade-III or grade-IV works, excluding works prescribed in Article 28 of the Decree on quality management of construction works.

2. Scope of activity:

a/ Class 1: To work as chief designers in the same professional domain for special-grade, grade-I, grade-II, grade-III or grade-IV works;

b/ Class 2: To work as chief designs in the same professional domain for grade-II, grade-III or grade-IV works.

Article 61.- Capacity conditions for consultancy organizations engaged in construction designing

1. The capacity of construction designing consultancy organizations is divided into 2 classes based on the kinds of works as follows:

a/ Class 1:

- Having at least 20 architects and engineers in the relevant disciplines, some of whom meet all conditions for working as class-1 construction design managers;

- Having sufficient class-1 chief designers in the disciplines relevant to works of the same kind;

- Having designed at least one special-grade or grade-I work or two grade-II works of the same kind.

b/ Class 2:

- Having at least 10 architects and engineers in the relevant disciplines, some of whom meet all conditions for working as class-2 construction design managers;

- Having sufficient class-2 chief designers in the disciplines relevant to works of the same kind;

- Having designed at least one grade-II work or two grade-III works of the same kind.

2. Scope of activity:

a/ Class 1: To design special-grade, grade-I, grade-II, grade-III or grade-IV works of the same kind; formulate important national projects, group-A, group-B or group-C projects of the same kind;

b/ Class 2: To design grade-II, grade-III or grade-IV works of the same kind; formulate group-B or group-C projects of the same kind;

c/ For organizations failing to meet all conditions for classification, they may design grade-IV works of the same kind and draw up economic and technical construction reports of works of the same kind.

Article 62.- Capacity conditions for consultancy organizations engaged in supervising construction of works

1. The capacity of construction supervision organizations is divided into 2 classes based on the kinds of works as follows:

a/ Class 1:

- Having at least 20 persons having construction supervisor’s practicing certificates in the relevant disciplines;

- Having supervised the construction of at least one special-grade or grade-I work or two grade-II works of the same kind;

b/ Class 2:

- Having at least 10 persons having construction supervisor’s practicing certificates in the relevant disciplines;

- Having supervised the construction of at least one grade-II work or two grade-III works of the same kind.

2. Scope of activity:

a/ Class 1: To supervise the construction of special-grade, grade-I, grade-II, grade-III or grade-IV works of the same kind;

b/ Class 2: To supervise grade-II, grade-III or grade-IV works of the same kind;

c/ For organizations failing to meet all conditions for classification, they may supervise the construction of grade-IV works of the same kind.

Article 63.- Capacity conditions for construction site chief commanders

1. The capacity of construction site chief commanders is divided into 2 classes, construction site chief commanders must have university or higher degrees in the discipline relevant to the kind of works and meet the conditions corresponding to each of the following classes:

a/ Class 1:

- Having worked continuously in construction for at least 7 years;

- Having worked as construction site chief commanders for one special-grade or grade-I work or two grade-II works of the same kind.

b/ Class 2:

- Having worked continuously in construction for at least 5 years;

- Having worked as construction site chief commanders for one grade-II work or two grade-III works of the same kind.

c/ For deep-lying and remote areas, those who have college or intermediate degrees in the construction discipline relevant to the kind of works, have at least 5 years’ experiences in construction may the post of class-2 chief commander.

2. Scope of activity:

a/ Class 1: To work as chief commanders for special-grade, grade-I, grade-II, grade-III or grade-IV works of the same kind;

b/ Class 2: To work as chief commanders for grade-II, grade-III or grade-IV works of the same kind.

Article 64.- Capacity conditions for construction organizations engaged in construction of works

1. The capacity of construction organizations is divided into 2 classes based on the kind of works as follows:

a/ Class 1:

- Having class-1 chief commanders for works of the same kind;

- Having enough architects and engineers trained in the disciplines relevant to the kinds of works to be constructed;

- Having enough technical workers who have training certificates relevant to the jobs they perform;

- Having major construction equipment for construction of works;

- Having constructed at least one special-grade or grade-I work or two grade-II works of the same kind.

b/ Class 2:

- Having chief commanders of class 2 or higher class for works of the same kind;

- Having enough architects and engineers trained in the disciplines relevant to the kinds of works to be constructed;

- Having enough technical workers who have training certificates relevant to the jobs they perform;

- Having major construction equipment for construction of works;

- Having constructed at least one grade-II work or two grade-III works of the same kind.

2. Scope of activity:

a/ Class 1: To construct special-grade, grade-I, grade-II, grade-III or grade-IV works of the same kind;

b/ Class 2: To construct grade-II, grade-III or grade-IV works of the same kind.

c/ For organizations failing to meet all conditions for classification, they may construct renovation or repair works worth under VND 3 billion in investment capital or individual dwelling houses.

Article 65.- Conditions for individuals providing independent professional services of designing, survey or supervision of construction of works

1. Conditions for individuals providing independent professional services of designing, survey or supervision of construction of works include:

a/ Having the practicing certificates relevant to the domain of practice;

b/ Having the business registration certificates for providing professional services of construction designing, survey or supervision according to the provisions of law.

2. Scope of activity:

a/ Individuals providing the independent professional service of construction survey may advise investors only on the elaboration of survey tasks, evaluation for approval of the results of surveys of a kind suitable to their certificates;

b/ Individuals providing the independent professional service of construction designing may design grade-IV works of the same kind and individual dwelling houses;

c/ Individuals providing the independent professional service of construction supervision may supervise construction of grade-IV works and individual dwelling houses.

3. Individuals providing independent professional services must carry out their activities in accordance with the provisions of law.

Article 66.- Rights and obligations of individuals who are granted the practicing certificates

1. Individuals who are granted the practicing certificates shall have the rights:

a/ To use their practicing certificates for performing jobs in accordance with the provisions of law;

b/ To complain about and denounce acts that violate the regulations on the grant of practicing certificates.

2. Individuals who are granted the practicing certificates shall have the obligations:

a/ To attend professional training courses related to the grant of practicing certificates for providing the professional services of construction designing, survey and supervision;

b/ To conduct construction designing, survey or supervision within the scope permitted in their practicing certificates;

c/ To take responsibility before law for the contents of dossiers they compile and for the quality of jobs they undertake;

d/ Not to erase or lend their practicing certificates.

Article 67.- Capacity conditions for foreign individuals and organizations engaged in project formulation, project management, construction survey, construction design or construction supervision in Vietnam

Foreign organizations or individuals engaged in project formulation, project management, construction survey, construction design or construction supervision in Vietnam must satisfy all capacity conditions prescribed in this Decree and the guidance of the Construction Ministry on the grant of practicing certificates.

Chapter VI

IMPLEMENTATION PROVISIONS

Article 68.- Organization of implementation

1. The ministers, the heads of the ministerial-level agencies, the heads of the Government-attached agencies, the presidents of the provincial/municipal People’s Committees, the heads of political organizations, socio-political organizations or socio-politico-professional organizations, the chairmen of the Managing Boards or the presidents of the directorates of enterprises, and the concerned organizations shall have to implement this Decree. The Construction Minister shall guide the transitional implementation.

2. Projects which are approved before the effective date of this Decree shall not have to be re-submitted for approval but the contents of subsequent jobs must comply with the provisions of this Decree.

Article 69.- Implementation effect

This Decree takes effect 15 days after its publication in the Official Gazette and supersedes the provisions on construction activities in the Regulation on investment and construction management, promulgated together with the Government’s Decrees: No. 52/1999/ND-CP of July 8, 1999; No. 12/2000/ND-CP of May 5, 2000; and No. 07/2003/ND-CP of January 30, 2003; supersedes the contents on construction biddings in the Regulation on Bidding, promulgated together with the Government’s Decrees: No. 88/1999/ND-CP of September 1, 1999, No. 14/2000/ND-CP of May 5, 2000 and No. 66/2003/ND-CP of June 12, 2003, which are contrary to this Decree’s provisions on selection of contractors in construction activities.

On behalf of the Government

Prime Minister

PHAN VAN KHAI

Appendix No. 1

CLASSIFICATION OF CONSTRUCTION INVESTMENT PROJECTS

(Promulgated together with the Government’s Decree No. 16/2005/ND-CP of February 7, 2005)

Kinds of construction investment projects

Total investment amount

I

IMPORTANT NATIONAL PROJECTS

Under National Assembly resolutions

II

GROUP A

1

Investment projects on construction of works in the domains of protection of national security or defense, which are of national secrecy or of important socio-political significance.

Unlimited

2

Investment projects on construction of works for production of noxious substances or explosives; on building of new industrial park infrastructure

Unlimited

3

Investment projects on construction of works of power, oil and gas exploitation, chemical and fertilizer, machine building, cement, metallurgy, mineral exploitation and processing industries; traffic projects (bridges, seaports, river ports, airports, railways, national highways), building of residential quarters.

Over VND 600 billion

4

Investment projects on construction of works of irrigation, traffic(other than those mentioned at Point II.3 above), water supply and drainage, technical infrastructure, electric technology, production of information, electronic, informatics, chemo- pharmaceutical, medical equipment, other mechanical engineering structures, production of materials, post and telecommunications.

Over VND 400 billion

5

Investment projects on construction of works of light industry, chinaware, porcelain, glassware production, printing; national parks, nature conservation zones, agricultural and forestry production, aquaculture, agricultural and forestry products processing.

Over VND 300 billion

6

Investment projects on construction of works of healthcare, culture, education, radio, television broadcasting, other civil construction (excluding the building of dwelling houses), warehousing, tourism, physical training and sports, scientific research and other projects

Over VND 200 billion

III

GROUP B

1

Investment projects on construction of works of power, oil and gas exploitation, chemical, fertilizer, machine-building, cement, metallurgy, mineral exploitation and processing industries; traffic projects (bridges, seaports, river ports, airports, railways, national highways), building of residential quarters

Between VND 30 and 600 billion

2

Investment projects on construction of works of irrigation, traffic (other than those mentioned at Point II.3 above), water supply and drainage, technical infrastructure, electric technology, production of information, electronic, informatics, chemo-pharmaceutical, medical equipment, other mechanical engineering structures, production of materials, post and telecommunications.

Between VND 20 and 400 billion

3

Investment projects on construction of works of technical infrastructure of new urban centers; light industry, chinaware, porcelain, glassware, printing; national parks, nature conservation zones, agricultural and forestry production, aquaculture, agricultural and forestry products processing

Between VND 15 and 300 billion

4

Investment projects on construction of works of healthcare, culture, education, radio, television broadcasting, other civil construction(excluding the building of residential quarters), warehousing, tourism, physical training and sports, scientific research and other projects

Between VND 7 and 200 billion

IV

GROUP C

1

Investment projects on construction of works of power, oil and gas exploitation, chemical, fertilizer, machine- building, cement, metallurgy, mineral exploitation and processing industries; traffic projects (bridges, seaports, riverports, airports, railways, national highways); general education schools in the planning (regardless of capital level), building of residential quarters.

Under VND 30 billion

2

Investment projects on construction of works of irrigation, traffic (other than those mentioned at Point II.3 above), water supply and drainage, technical infrastructure, electric technology, production of information, electronic, informatics, chemo-pharmaceutical, medical equipment, other mechanical engineering structures, production of materials, post and telecommunications.

Under VND 20 billion

3

Investment projects on construction of works of light industry, chinaware, porcelain, glassware production, printing; national parks, nature conservation zones, agricultural and forestry production aquaculture, agricultural and forestry products processing.

Under VND 15 billion

4

Investment projects on construction of works of healthcare, culture, education, radio, television broadcasting, other civil construction (excluding the building of residential quarters), warehousing, tourism, physical training and sports, scientific research and other projects

Under VND 7 billion

Notes:

1. Group-A projects on railways or land roads must be phased out according to the length and grades of railways, roads and bridges under the guidance of the Ministry of Transport.

2. Projects on the building of working offices or buildings of state agencies must be executed under decisions of the Prime Minister.-